Castor seed futures reduced by Rs. 115 per quintal at the beginning of this week. This was due to shortening of holdings by the traders in view of lower physical markets.
At the National Commodity and Derivatives Exchange platform, castor seed delivery for May plummeted by Rs 115, or 2.58 per cent, to Rs 4,350 per quintal, with an open interest of 27,400 lots.
Castor seed prices decreased by Rs. 67 to Rs. 4319 per quintal in futures trade as participants liquidated holdings pressurized by weak domestic spot.
At the National Commodity and Derivative Exchange, castor seed for delivery this month contract dipped by Rs 67 or 1.53 per cent to Rs 4,319 per quintal, clocking an open interest of 42,530 lots.
Castor seed prices were trading higher by Rs 16 to Rs 4,738 per quintal in futures trading as participants created fresh positions amid a firm trend at the physical markets.
At the National Commodity and Derivatives Exchange, castor seed for April delivery recovered by Rs 16, or 0.34 per cent, to Rs 4,738 per quintal, with an open interest of 1,370 lots.
While commodity derivatives market regulator SEBI might have had concerns arising out of price volatility, it appears that the directive to the exchanges to impose a special cash margin of 20 per cent on the long side with effect from March 27 was issued without a clear understanding and appreciation of the current fundamentals and dynamics of the castor market.
Following high production and burdensome inventory, for four years castor seed rates generally ruled at relatively low levels, falling to as low as ₹3,100 a quintal exactly a year ago.
Castor seed growers were the worst hit by low prices. This year they responded as they usually do and in the only way they know.
Castorseed prices were higher by Rs 65 to Rs 5,125 per quintal in futures trading this week on Wednesday as participants expanded their exposure in line with a firm trend at the domestic spot markets amid positive overseas markets.
At the National Commodity and Derivative Exchange, castorseed for delivery in May was up by Rs 65 or 1.28 per cent to Rs 5,125 per quintal, with an open interest of 82,350 lots.
Castor seed futures on NCDEX ended high during the end of last week. Most active April contracts rallied higher to end the week at Rs. 4561 per quintal as against the previous week’s closing of Rs. 4280 per quintal.
A fall in supply across major markets and rise in demand from domestic traders led to a rally in prices. Domestic crushers increased the purchase in anticipation of rise in export demand for castor oil and castor meal.
Castorseed prices rose by Rs 35 to Rs 4,075 per quintal in futures trading last week as participants created positions amid a firm trend at the physical markets.
Also, delivery in current month delivery went up by Rs 33, or 0.83 per cent, to Rs 4,026 per quintal, in an open interest of 10,940 lots.
Multi Commodity Exchange of India has launched a futures contract in castor seed after receiving approval from Securities and Exchange Board of India. With this launch, MCX has added another contract to its agri-commodities products suite, in the oil and oilseeds complex.
The exchange has currently launched February, March, April and May 2017 contracts in castor seed, with 10 MT (metric tonnes) as the trading unit and Deesa (Gujarat) as the basis centre.
Castor seeds futures, a leader in the segment and suspended by the National Commodity and Derivatives Exchange (NCDEX), are likely to be relaunched again. The market regulator, the Securities and Exchange Board of India (Sebi), is considering a proposal on this and is likely to announce its decision soon.
Multi Commodity Exchange (MCX) has also applied for castor seed futures and is awaiting Sebi’s approval.
Castor seed prices increased due to increased demand from the crushers on the spot, while there was a decrease on futures as traders booked the profit at higher level.
The export demand for castor oil had increased the demand from crushers. The price of the castor oil was up Rs. 5 to Rs. 830/10 kg.